The bank’s Monetary Council has left the base rate on hold since signalling an end to an easing cycle at a policy meeting in the spring of 2016.

However, the rate-setters have made use of “unconventional, targeted” instruments to ease monetary policy further. The Council also left the overnight central bank deposit rate at -0.15% and the overnight collateralised loan rate at 0.9% at the meeting on Tuesday.

In a statement released after the meeting, the Council reiterated the policy stand it took at the previous monthly rate-setting meeting in June. After that meeting, the Council suggested an adjustment to the timeframe for maintaining its loose policy compared to earlier communications.

The NBH later confirmed for MTI that the Council believes the current loose monetary conditions cannot be maintained until the end of the 5 to 8-quarter policy horizon.

“In the Council’s assessment, maintaining the base rate and the loose monetary conditions is still necessary to achieve the inflation target in a sustainable manner,” the rate-setters said after the policy meeting on Tuesday.

“The Council will ensure the maintenance of loose monetary conditions, necessary to achieve the inflation target in a sustainable manner, by using the current set of monetary policy instruments,” they added.

The Council stressed that the central bank’s “single anchor is inflation”, adding, however, that it “takes account of all factors influencing inflation developments”.

“These may include developments in commodity prices, changes in the external inflation environment, labour market conditions, the position of the real economy, developments in the exchange rate and credit market conditions,” the Council said.

“By taking into account all these factors, the [central bank] is able to assess the likely magnitude and persistence of future price changes, which in turn determines the monetary policy response,” it added. The statement contained no further mention of exchange rates.